Today, HPE paid $650 to acquire Simplivity. HPE paid this sizeable amount mainly to acquire OmniStack, Simplivity’s data virtualization software platform. OmniStack’s central value proposition is OPEX reduction through the elimination of traditional infrastructure management tasks. In short, Simplivity enables customers to manage their infrastructure at the virtual machine (VM) – level. Please note that there will be a separate EMA Impact Brief covering this topic in much more detail.

Strategic Analysis
Today, HPE already offers its HPE HyperConverged Operating Environment 2.0 and numerous Hyper Converged hardware solutions. In addition, HPE just launched its “composable infrastructure” offering.

Then why spent $650m on Simplivity’s data virtualization layer technology? Because HPE’s converged products and composable infrastructure offering still include too many “moving parts” that have to be managed (WAN acceleration, hypervisor, file storage, block storage, data protection, cloud gateway, deduping and SSD and spinning disk arrays). This still provides more than enough ammunition for CFOs to raise an eyebrow and demand the move to Amazon Web Services or Microsoft Azure. And that exactly is why Simplivity was worth the $650m. Each workload moving to the public cloud is unlikely to ever return to HPE hardware or management tools. So by arming enterprise IT with a strong OPEX argument against AWS and Azure, OmniStack will be the dam that prevents even more application workloads from moving out of the data center for good.

Highlights of the IP that Cost $650m
• All operations management happens centrally and at the VM-level. Customers can leverage their existing management tools such as vSphere, vRealize or another platform able to manage VMware ESXi resource pools.
• VMs across any number of worldwide data centers are stored and managed within one central data virtualization layer. This means:
o They can be moved freely between Simplivity appliances, even across geographical locations.
o Deduplication (WAN optimization) enables almost instant backups, clones and rapid site replication.
o Clones and backups can be moved very fast, as only the delta is stored.
o Increased density, as only deltas between VMs are stored (also positive effect on CPU and RAM usage).
• VM-placement and data protection policies are centrally applied for all VMs across the entire enterprise.
• OmniStack enables linear scalability, as the data virtualization layer can be scaled across additional infrastructure resources across locations.

In Short: Simplivity’s Data Virtualization layer can become a great asset to HPE, if the company manages to leverage this technology across its vast portfolio.

Interesting questions that will be answered shortly in the form of an EMA Impact Brief
How quickly will HPE manage to merge OmniStack technology with its existing infrastructure and management offerings?

How does HPE fit in with 3PAR storage?

What about the API? That’s why customers really move to Amazon.

How about support for containers and “serverless” computing?

How does this position HPE versus Nutanix, Pivot3 and the rest of the competition?

What will happen to existing customers running Simplivity on a competing hardware platform, such as Cisco, Lenovo, Dell or Huwaei?